Enterprise Collateral Management Systems For The Trading Book 2016

This report is an update to the Enterprise Collateral Management Systems 2012 report and looks at the underlying factors of the current state of the collateral management systems market as well as key developments.

Regulators shaping the market: Improved liquidity requirements, extended clearing and increasing standardization of Credit Support Annexes (CSAs). Regulators are changing the marketplace more than ever, with stricter procedures for:

• Entering into collateral agreements,
• Repurposing collateral,
• Maintaining the liquidity balance of a Financial Institution (FI),
• Trading volatile and complex derivatives.

Firms are now having to respond to new demands to make the market transparent whilst maintaining appropriate levels of capital to survive stress periods.

Collateral can be used for profit, it’s not just a cost. No longer is collateral viewed solely as a set-aside from profits which reduces the benefit potential in line with the risk. Business opportunities such as collateral transformation are rewarding those who manage their collateral well with enhanced opportunities to directly generate revenue. Even without resorting to transformation, efficient collateral management utilizing sophisticated optimization is becoming paramount as collateral opens avenues for strategic trades with companies otherwise unwilling to risk the deal.

Integrating the silos. The traditional siloed view is breaking down; joining up an enterprise-wide inventory of assets is now viewed as being integral. All collateral processes handle copious volumes and rapid speeds of processes and are now based on better decision making. However, providing
greater volumes of data to a larger audience with varying specialist knowledge is becoming a serious technology demand and a stress on the scales of the operation. These computational costs for near /real-time processing are leading to a general re-architecting of systems, whether internal or 3rd party.

Racing for efficiency. FIs are being forced to conform to many new requirements and expect their systems to be able to handle these, as well as optimizing the process to ensure they handle them in the most efficient way possible. The competition for vendors to offer a full, optimized solution may shape the future of the supply side, transforming the landscape and the nature of the vendors that populate it. Whether using internal systems or a 3rd party, or outsourcing, significant investment is required. This competition within 3rd party technology providers is shown by major suppliers’ changes of ownership which have been continually taking place in the market.

This report uses Chartis’s FinTech Quadrant™ to explain the structure of the market. The FinTech Quadrant™ uses a comprehensive methodology of in-depth independent research and a clear scoring system to explain which technology solutions meet an organization’s needs. The FinTech Quadrant™ does not simply describe one technology solution as the best collateral management solution; it has a sophisticated ranking methodology to explain which solutions would be best for buyers, depending on their implementation strategies.

This report covers the leading vendors offering collateral management systems for banking, including 4sight, AcadiaSoft,Bloomberg ,Calypso,CloudMargin, FIS, Intellect Design, Lombard Risk Management, MathWorks, Misys, Murex, OMGEO, OpenLink, Quartet FS, SimCorp, SmartStream and TMX Razor Risk.